Ok, This place was fabulous!!!! It is the only hostal in the Albaicin district and only 3 rooms, since i booked so early in advance, we got the best room with an incredible, unobstructed view of the Alhambra.
It is run by a nice man who speaks English, he picked us up at Plaza Nueva and we treked the hills for about 5 minutes till we came to the hostal. The place is a 17th century convent which he converted in 1997. The house savored the period without sacrificing modern amenities...He even supplied me with a blowdryer upon request...Breakfast was extra(550 pesetas), and he also provided room service-wine, beer, and snacks for reasonable prices...
The proprietor recommended booking a few months in advance as it only has 3 rooms. it turned out to be 12,000 pesestas a night, but for a magical view, no tourists, quiet neighborhood, this was a deal.
We loved the experience of staying in a beautiful, historic neighborhood and upon our return, will surely stay there again.